A move to tighten the 457 temporary visa program could do immense damage to regional economies, according to National Party Senate Leader Barnaby Joyce.
Senator Joyce said if industries like abattoirs couldn't access overseas workers to fill jobs unwanted by Australian workers, then entire factories could close, taking local jobs with them.
''If there are companies rorting the system, then the government already has the power to exclude them from the scheme. It doesn't need to tighten the scheme as a whole,'' said Senator Joyce.
On Saturday, Immigration Minister Brendan O'Connor announced the visa program would be tightened to protect the interests of Australian workers.
He said that the growth in visa numbers had outstripped skills shortages and natural employment growth, leading to discrimination against local workers and lower wages.
''Australians deserve the chance to get local jobs on local projects and the Government is determined to make that happen,'' Mr O'Connor said.
''We have seen too many examples of abuse across the nation. We have seen situations where peoples' jobs have been 'dressed up' to be so-called skilled jobs but in fact when they come here they are working in unskilled or semi-skilled areas.''
Reforms to the scheme will include tightening English language requirements, restricting the ability of employers to pass on visa holders to other employers, and beefing up compliance and enforcement powers.
The Minister said that employers will be required to demonstrate that a genuine lack of skilled workers exists, and that they are committed to training local workers.
But Senator Joyce said the announcement was nothing more than an admission of failure.
''If this is just a rhetorical flourish to appeal to those worried about foreign workers, then it's a dangerous game to play. If the government really is cutting back the scheme, then it could do enormous damage in the bush,'' he said.
''The reality is that there are places in Australia that people in Western Sydney don't want to move to, and there are jobs they don't want to do.''
The 457 visa scheme allows foreign workers to come to Australia temporarily to fill skilled jobs if no Australian workers are available.
The Labor government already tightened the scheme after coming to office in 2007.